Vermilion Int'l Compass: Global Equity Strategy
ISticking With ChinaWe remain near-term bullish since our 4/22/25 Compass, and our intermediate-term outlook remains bullish as well (as of our 5/14/25 Compass), with Int'l Compass reports all echoing this sentiment. We will maintain our bullish intermediate-term view as long as market dynamics remain healthy and the SPX and ACWI-US are above 6028-6059 and $119-$121. Our bullish near-term outlook will remain in place as long as the 3-month uptrend continues on ACWI-US. Short-term supports to watch on ACWI-US continue to be $132, the 3-month uptrend (currently $130.70), $130, $128, $125-$126, and $123-$123.50. All signs point to the ACWI-US uptrend continuing for the foreseeable future.
Remain Overweight China, Korea, U.S., and Greece. Our four country overweights include China (Shanghai Composite), Korea (KOSPI), the U.S. (S&P 500), and Greece (ATHEX Composite). China (Shanghai Composite) has been a major focus ever since our July 3 Int'l Compass titled "China and Japan Breaking Out," and it continues to offer the most attractive opportunities, with a significant number of today's recommendations coming from China. Japan's TOPIX and TOPIX Small indexes also remain bullish, but RS remains below multi-month resistances; we would upgrade Japan to overweight on RS breakouts. Europe (EURO STOXX 50) failed to hold the breakout above 5470, signaling more consolidation is needed... see chart below and page 2.
Emerging Markets Overview. A 3.5-month uptrend is firmly in place on MSCI Emerging Markets (EEM-US), with support right at its 50-day MA. We expect support to show up at the uptrend, but as long as it remains above $46 base support we will maintain our bullish outlook on EM. $48 is another important support level. Ever since our July 3 Int'l Compass, China has been our favorite country to be buying now, though Korea, Greece, and Taiwan (primarily the Technology Sector in Taiwan) remain attractive as well.
Actionable Themes: Consumer Discretionary, Materials, and Technology. We highlight attractive names within these Sectors. China/Hong Kong remains well-represented. Materials and Technology are two of our favorite Sectors that are leading the way within China/Hong Kong, and EM more broadly; the others are Communications and Health Care... see pages 3-21.
Galaxy Entertainment is an investment holding company, engaged in operation in casino games of chance or games of other forms, as well as the provision of hospitality and related services in Macau. In addition, Co. manufactures, sells and distributes construction materials through its Construction Materials Division across Mainland China, Hong Kong and Macau. Co.'s segments include gaming and entertainment, and construction materials.
Sands China and its subsidiaries are principally engaged in the operation of casino games of chance or games of other forms, the development and operation of integrated resorts which contain not only gaming areas but also meeting space, convention and exhibition halls, retail and dining areas and entertainment venues and other ancillary services including ferry operations and other related operations in the Macao Special Administrative Region of the People's Republic of China.
Vermilion Research delivers timely, actionable, and unique research inputs to professional investors. Our research strategists highlight securities which we believe are at major inflection points, based on our various proprietary technical indicators, and offer asymmetric risk/return profiles. We believe our research methodology, which is not limited by industry sector or market capitalization, enables us to deliver superior investment recommendations.
Our process begins by organizing all actively traded stocks into coherent sectors, then into logical industry groups. We then apply our proprietary relative strength tools to identify developing price trends. Once attractive trends are identified within a selected sectors or groups, we screen for individual stocks which we believe offer the best risk/reward profile. Vermilion offers U.S. and global equity market research products. Vermilion’s research team, which has received numerous awards and accolades, has a combined 70 year of experience in the analysis of investment securities.
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